8. TE Connectivity plc (NYSE:TEL)
Number of Hedge Fund Holders: 44
TE Connectivity plc (NYSE:TEL) is an Ireland-based company that designs and produces a diverse range of electronic components and electrical parts, such as different types of connectors, heat shrink tubing, automotive relays, and various sensors. The company reported strong earnings in fiscal Q1 2025. In the transportation segment, the company continued to manage a fluctuating global vehicle production landscape, achieving strong results while fostering innovation among global customers in growth areas like electrification and next-generation vehicle data connectivity. The company also achieved double-digit sales growth in its industrial segment, expanding margins due to strong momentum in AI programs with multiple customers and leveraging ongoing strength in its AD&M and energy businesses.
TE Connectivity plc (NYSE:TEL) reported revenue of $3.84 billion in fiscal Q1 2025, up 0.65% from the same period last year. Orders totaled $4.0 billion, reflecting a 6% year-over-year increase and a 4% rise sequentially, primarily driven by the Industrial segment and growing momentum in artificial intelligence programs. The operating margin was 18%, while the adjusted operating margin reached a quarterly record of 19.4%, fueled by strong operational execution.
The London Company highlighted the strengths of TEL in its Q2 2024 investor letter. Here is what the firm has to say:
“Initiated: TE Connectivity Ltd. (NYSE:TEL) – TEL designs and manufactures connectors and sensors, supplying solutions to the transportation, industrial, and communications industries. The critical components that TEL sells have long life cycles and they make up a small percent of the overall cost of materials for a complex electronic systems (i.e. low cost but high-cost failure products), creating high switching costs and barriers to entry. TEL has leading share in the global connector market (including 30-35% share in automotive) with leverage to secular growth from the ‘electrification’ of multiple end markets. TEL’s management team has enacted successful cost- realignment strategies, driving significant margin improvement and leading to mid-teens returns on invested capital. TEL fits our process well. It has a low level of net debt, generates healthy cash flows, returns a significant amount of capital back to shareholders through its dividend and buyback program, and it currently trades at a discount to our estimate of intrinsic value and a discount to its peers. Given its strong competitive position, capital allocation philosophy, and favorable industry tailwinds, we believe TEL presents an opportunity to own a high quality compounder.”
TE Connectivity plc (NYSE:TEL), one of the best dividend stocks, reported a strong cash position which is sufficient to fund its dividend payouts. The company’s operating cash flow for the quarter came in at $878 million, which saw a 22% growth from the prior-year period. Its free cash flow also jumped to 18% on a YoY basis at $674 million. The company also returned approximately $500 million to shareholders through dividends and share repurchases. It has been growing its payouts for 10 consecutive years and offers a quarterly dividend of $0.65 per share. The stock supports a dividend yield of 1.67%, as of January 22.
TE Connectivity plc (NYSE:TEL) was included in 44 hedge fund portfolios at the end of Q3 2024, down from 46 in the preceding quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds have a total value of roughly $2 billion.
7. Corning Incorporated (NYSE:GLW)
Number of Hedge Fund Holders: 46
Corning Incorporated (NYSE:GLW) is an American multinational technology company that specializes in advanced optics, ceramics, and specialty glass. The company’s glass products are some of the most specialized and high-margin items in the industry. It is an innovator in materials science, producing a variety of glass, ceramic, and fiber optic products that are essential in areas like high-speed communications, touchscreens, display panels, and life sciences. The stock has generated solid returns in the past year, surging by nearly 77%.
In the third quarter of 2024, Corning Incorporated (NYSE:GLW) reported revenue of $3.73 billion, which showed an 8% growth from the same period last year. The company is achieving key milestones in its ‘Springboard’ plan. In the Display Technologies segment, it implemented price increases and expects to generate net income between $900 million and $950 million in 2025, while maintaining a net income margin of 25%. In the Optical Communications segment, new products designed for generative AI are experiencing strong demand, driving record year-over-year growth in the Enterprise business. In addition, the company recently announced a multiyear supply agreement valued at over $1 billion with AT&T, aimed at providing next-generation fiber, cable, and connectivity solutions to support the expansion of AT&T’s fiber network and deliver high-speed internet to more Americans.
Corning Incorporated (NYSE:GLW) also generated stable cash in the most recent quarter. The company’s operating cash flow and free cash flow came in at $699 million and $553 million, respectively. It currently pays a quarterly dividend of $0.28 per share and has a dividend yield of 2.07%, as of January 22.
Corning Incorporated (NYSE:GLW) was a popular buy among elite funds at the end of Q3 2024 as hedge fund positions in the company grew to 46, from 35 in the previous quarter, according to Insider Monkey’s database. The stakes held by these funds are worth over $851 million.
